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| Question | Answer |
| Two Theories of Financing | Title Theory and Lien Theory |
| Types of financing sources | credit unions, mortgage banking companies, mortgage brokers |
| Financial Institutions Reform, Recovery, & Enforcement Act (FIRREA) | A federal law that restructured the savings and loan regulatory and insurance systems |
| Three parties to the deed of trust instrument | the trustor, the beneficiary, and the trustor |
| Conventional Loan | A loan that is made by a private lender and does not have guarantee from a third party backing the loan |
| FHA Loan | A loan insured by the Federal Housing Authority |
| VA Loan | A loan made to veterans and guaranteed by the U.S. Department of Veteran Affairs |
| Adjustable-Rate Loans | A loan which the interest rate starts lower and then changes so often |
| These are the 3 major secondary lenders | 1) The Federal National Mortgage Association 2) The Government National Mortgage Association 3) The Federal Home Loan Mortgage Corporation |
| Annual Percentage Rate (APR) | The interest rate on a loan |
| Maker | the borrower in a promissory note |
| Lender | payee or holder in a promissory note |
| Mortgage Broker | A licensed person that serves as the middle person and brings together the lender and borrower for a fee |
| Mortgagor | The borrower |
| Mortgagee | The lender |
| Straight Loan | A loan that the borrower makes occasional interest payments and the entire principal is paid at the end |
| Balloon Mortgage | A loan that periodic payments are are less then the amount that is needed to pay and the principal turns into a large payment at the end |
| Amortized Loan | A loan in which constant payments are made through out the years of the loan |
| Federal Truth in Lending Act (TILA) | A federal law that requires lenders to make full disclosures of all the costs earned in obtaining credit |
| Home Ownership and Equity Protection Act (HOEPA) | Requires additional disclosures and forbids certain practices when a borrower obtains a high-cost loan |
| Good Faith Estimate (GFE) | A summary of loan terms and an estimation of closing costs obtained by borrowers |
| Real Estate Settlement Procedures Act (RESPA) | Requires the lender to provide the borrower with a Good Faith Estimate within 3 days from the date the loan application is submitted |
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